SENIOR ADMINISTRATION OFFICIAL: I think it's pretty
clear from some of the reports some of your colleagues are doing that we
have done a lot of work on the Information Technology Agreement and
working toward a tariff-free environment on information technology, and
that includes the components -- electronic components such as
semiconductors as well as fax machines, software, computer hardware,
telecommunications devices and switches, not the service itself.

And the President did a great deal of work on that
yesterday, beginning at the start of the day with his bilateral meeting
with President Ramos and going all the way through the day. And I think
it has shown in large measure the leadership that he brought to bear and
the use of the relationships that he has developed over a long period of
time, especially the one with Prime Minister Hashimoto.

But I think something that could be overlooked in this
is the tremendous effect this has on economies and what this sector
really means. And for that reason, I have asked a senior administration
official to come over and talk to you a bit about just what this sector
means and the impact that tariff-free trade in that area could have on
the American economy and on trade in the APEC area over the next several
years.

So I would like to turn the lectern over to my colleague.

Q Will you be available to talk a little bit more about
the evolution after that?

SENIOR ADMINISTRATION OFFICIAL: Yes.

Q Is this being piped back to the briefing room or --

SENIOR ADMINISTRATION OFFICIAL: I don't believe it is.

Q (Inaudible.)

SENIOR ADMINISTRATION OFFICIAL: Okay. Let me just
remind you -- I'm sure you've heard all of these facts -- this region is
very big. It's very important to our future. It is growing faster than
any other region in the world. The barriers here are some of the most
difficult in the world. And that's why APEC has been so important to
the President. That's why securing the strong endorsement of an
information technology agreement is so important both for the U.S.
economy and for the region.

Just to remind you, this is a region with a population
of over 2 billion and $16 trillion of annual income. That's a big
number. It accounts for more than 45 percent of world trade and that's
growing. U.S. exports to the region are huge. Over $360 billion last
year. That's over 60 percent of U.S. exports are going to this region.
And to Asia, the Asian members of APEC alone, our exports are already 60
percent greater than our exports to the EU. That's why we all -- the
President, his administration -- spend a lot of time and effort making
sure that our companies have access to this region, making sure that
markets are continually being opened to this region.

That's also why achieving the strong endorsement of APEC
leaders of the Information Technology Agreement is so important. The
Information Technology Agreement will substantially eliminate tariffs
around the world on products from semiconductors to software, computers
to telecom, faxes to modems. These products are the infrastructure, the
bridges, the highways, the roads of the 21st century. This is an
enormously important sector from the point of view of the future
dynamism of our economy.

There has been enormous growth in this sector worldwide.
In terms of trade alone, exports, trade in this sector worldwide have
grown from $350 billion at the beginning of the decade to $500 billion
in the middle of the decade last year, and is expected to approach $800
billion by the end of the decade.

Overall production in this sector is $1 trillion. The ITA
will amount to a giant tax cut in this sector. That's important both on
the production and export side; it's also important on the import side
because these are the components that are so important in the
competitiveness of other export sectors. The automobile industry is the
biggest user of semiconductors, for instance.

Now let me talk a little bit about why is this so important
for the U.S. We're enormously competitive in this sector already.
We've got $100 billion worth of exports a year in this sector already.
That's twice as much as our automobile industry. That's nearly four
times as much as our aircraft industry. We've got 1.8 million American
workers in this sector in the United States. Again, it's more than both
the aircraft and automobiles combined. And those are in general very
good jobs, paying 16 percent higher wages than on average. So this is
an important sector to our economy and we're doing very well in it.

We're already number one in many of these sectors. We're
number one on semiconductors. We're number one on software. We're
number one in telecom equipment. We're number one in computers. As a
matter of fact, we dominate 75 percent of the global software market.
So U.S. firms are already extremely strong in these sectors, and we
stand to gain a lot from tariff reductions around the region.

I just want to give you one or two examples. In the case
of computers, for instance, computer tariffs on average, in China,
Thailand, Philippines, Indonesia, are 20 percent. That's about seven
times higher than in the United States. And our companies are poised to
take advantage of the tariff reduction that the Information Technology
Agreement would bring.

There is another area, semiconductors, in which tariffs in
Europe are 14 percent compared with zero tariffs in the United States.
Again, if we manage to secure an Information Technology Agreement in the
WTO in December, that will be tremendously significant for our very
competitive semiconductor firms.

But I also want to stress one last thing because this has
been portrayed as something that would disproportionately benefit the
U.S. APEC, the Asian region, the ASEAN members of APEC, APEC as a whole
stands to gain enormously from conclusion of an Information Technology
Agreement in the WTO. APEC already accounts for 80 percent of world
trade in information technology equipment. And just to give you an
example, ASEAN exports $30 billion worth of information technology
products to the U.S. and $12 billion worth to Europe, a region that has
just as big a market, and presumably as they bring their tariffs down
should be importing just as much from the ASEAN countries. So this is
something that's in everybody's interest.

In terms of -- given the size of this, given the importance
of this to the region, when President Clinton came here it was very
clear this was a very important initiative for him, and it was important
for him to bring all the APEC leaders with him. This is something that
he's worked a lot on over the course of the year with the officials of
the Philippine government. And starting with his meeting yesterday
morning with Philippine President Ramos, it was clear that we were going
to get a lot of help from President Ramos. This was something which is
his initiative as well. This is something on which he has shown
tremendous leadership. And he and the President worked very closely
together.

As was said earlier, he also met yesterday with Prime
Minister Hashimoto, and the two together worked this issue very
effectively. I think one of the things that you see coming out of the
leaders with such a ringing endorsement of this agreement is that given
the President's four years' worth of relationship building in this
region, the trust and confidence that he has built up over time -- many
of these leaders he has been working with now for four years; some of
them for slightly less than that -- there is a lot of trust in his
ability to bring things along and bring things to conclusion. And so
there were a lot of leaders that were happy to move forward with him and
to come out with a very strong statement on this issue.

Q Can I follow up just on that? You say it was a ringing
declaration. Is the fact that it says "eliminate substantially," is
that softer, that it doesn't just say "eliminate" the tariffs. Is that
a word we wanted in there?

SENIOR ADMINISTRATION OFFICIAL: "Eliminate substantially"
we think gives us what we need in terms of this commitment to really go
to zero on tariffs in this sector on a variety of products. And we're
going to be seeking the broadest possible product coverage. So I think
we feel comfortable with that wording. I think it's wording that's been
used in the past, on the Uruguay Round, on zero-for-zeroes. I think
this was something that we felt very comfortable with. And I think the
meaning of the statement is very clear. What we're talking about is
free trade in this sector.

Q -- what we wanted all along is eliminate -- total
elimination by the year 2000, right?

SENIOR ADMINISTRATION OFFICIAL: We've been very clear that
what we want to do is achieve free trade in this sector by the turn of
the century. We've also been very clear that we understand countries
have different circumstances, different products, and so we've always
talked about flexibility on staging, et cetera. But, yes, we very much
want to see an Information Technology Agreement that really does achieve
free trade.

Q -- products itemized in this statement?

SENIOR ADMINISTRATION OFFICIAL: No. None of the product
coverage issues, none of the staging issues were set for or ripe for
discussion at this meeting. That's really something that is technical;
it requires technical level negotiations in Geneva. And even if we had
wanted to do it here, most of that work would have been done in Geneva
through the WTO. That's something that needs to be worked out by the --
towards the WTO Singapore ministerial. That's not something that we
were hoping for at APEC.

Q The wording "eliminate substantially --"

Q Can you repeat the questions? If this is being piped
into the filing center, they won't be able to hear us asking questions.

SENIOR ADMINISTRATION OFFICIAL: Certainly.

Q Okay. But the wording "eliminate substantially," that
was not -- was that our proposed -- the U.S.-proposed language, the word
"substantially."

SENIOR ADMINISTRATION OFFICIAL: Yes, we're very
comfortable with that language. We're very happy with the language.

Q Can you give us an idea of some of the countries that
were opposed to this? I mean, that had to be won over.

SENIOR ADMINISTRATION OFFICIAL: That were opposed to the
initiative?

Q Well, that had to be won over.

SENIOR ADMINISTRATION OFFICIAL: My sense is that at the
leaders level we really had a tremendous amount of support for this
initiative. I think it took some work, but again, let me just stress,
ASEAN has $30 billion worth of exports to the United States and $12
billion worth of exports in these products. From --

Q But wait a minute, if there was so much support, this
would not have been a contentious issue until 24 hours before the
summit. Obviously there were some heads of state, developing countries,
that did not support it. How were they won over? I mean, if there was
so much support --

Q Actually, who were these -- if you've negotiated this
triumph, who did you negotiate with?

SENIOR ADMINISTRATION OFFICIAL: I think that it was fairly
clear to most of the countries in the region that they stand to gain
tremendously from this agreement. I don't think it's -- I would prefer
not to go into the specifics of the negotiations. But I would say that
different formulations were tried. The biggest concern was over the
issue of flexibility, and we've always been very clear that flexibility
would be important to making this agreement come together. And I think
as long as we had established that principle, that there was tremendous
support for this initiative.

Q Can you go into the timing a little bit? When was this
language that we see here finally hammered out? When was it reached?

SENIOR ADMINISTRATION OFFICIAL: The leaders declaration
language is something that's always worked on. As you know, it's
something that the host country really has ownership of. It's not
something that is negotiated the way a general agreement would be
negotiated. So this language has been evolving over the last several
days. Obviously the outcome of the ministerial had some impact on what
the leaders were willing to contemplate. I think there was a real sense
that leaders should go beyond ministers, that leaders come here because
they're able to lead and they're able to go forward and move ahead of
their ministers.

Q I understand that and I understand it evolved. But when
was the final evolution on this? The wording that we see here, when was
that locked in? This was today? Was it last night?

SENIOR ADMINISTRATION OFFICIAL: I think it was worked on
over the course of the last several days and quite intensively over the
course of yesterday. But it's been locked in -- normally leaders meet
the evening before and discuss language. I think everybody felt very
supportive of it by yesterday evening.

Q So at midnight this was locked in?

SENIOR ADMINISTRATION OFFICIAL: Earlier than midnight.

Q What is flexibility? What do you mean by flexibility?
Does that mean it's not a commitment then?

Q When would you estimate we are going to get some hard
numbers on when -- on individual products and individual companies? You
talked about the Geneva process, but when --

SENIOR ADMINISTRATION OFFICIAL: The next focal point for
this initiative is clearly going to be the WTO ministerial that occurs
in Singapore in December. And I think we'll know a lot more then about
how much agreement there is on specific products and timing.

Q Did this come up at all last night at the dinner? You
said it was cemented in before midnight. All the leaders were together
last night at dinner. Was this -- at dinner last night? Was it brought
up at the dinner by the President?

SENIOR ADMINISTRATION OFFICIAL: No. This is something
that leaders all felt comfortable before they walked into the dinner
last night.

Q Did the United States give up on any areas where it was
reluctant to cut back tariffs as kind of a trade-off to get this?

SENIOR ADMINISTRATION OFFICIAL: This is not a tariff
package. It's not a sort of sign-on-the-dotted-line tariff deal, so
there was no real giving up or concessions. This was not the
negotiation -- I think it's really important to stress that. There is a
lot of work that will still need to be done. This is something that we
want to gain WTO-wide support on. It's very important to have other WTO
members on board. So this was not the right forum to do that in. So
it's not really a relevant issue.

Q Take out the comment "trade-off"; was there any areas in
which the United States came into this whole process where it did not --
where it was reluctant to cut back on tariffs and it agreed to go beyond
where it might have been -- it might have --

SENIOR ADMINISTRATION OFFICIAL: There were no discussions
about it at this meeting, no.

Q Can I ask you, on the final words on that, the
"recognizing the need for flexibility as negotiations in Geneva
proceed," what exactly -- does that mean that some of them -- some
countries don't have to reduce their tariffs? I'm not --

SENIOR ADMINISTRATION OFFICIAL: Again, that's a sort of
trade term of art. What it means is that countries are going to have to
negotiate specific phase-ins on specific product lines on a
tariff-line-by-tariff-line basis. But again, that's something that's
going to happen in the WTO process, and it's a sort of standard trade
negotiating process that will need to take place.

Q I'm a little confused. The President had a meeting with
Ramos yesterday and this was brought up and agreed we're going to push
harder for the 2000 time. Who went to developing nations that have been
the ones that have been standing in the way of this? Did Ramos then go
to some of the nations to push harder?

SENIOR ADMINISTRATION OFFICIAL: There was a tremendous
amount of discussions back and forth among leaders yesterday, among a
whole variety of leaders. I don't even think I could begin to describe
to you all the discussions. As you know, a lot of bilateral meetings go
on on the edges of the APEC meeting. I'm not even aware of most of the
meetings that took place. But there were a number of countries who were
extremely helpful and there were a variety of discussions -- again,
which I'm not even -- some of them which I'm not aware of, but in that
process we certainly had a lot of support from a variety of countries.
And I don't want to make that distinction between developed and
developing, because I don't think that is the right way of thinking
about it. That was not -- that is not a dividing line in this region.
There are developing countries in this region who are doing tremendously
well in the information technology sector. This is a sector which
benefits countries at a whole variety of levels of development, so I
don't think that's the right way of thinking about this agreement.

Q Did the President have discussions with other leaders
besides the four he had bilaterals with on this issue? Did he have any
phone conversations with any other leaders, pushed them on this issue?

SENIOR ADMINISTRATION OFFICIAL: The President had a lot of
-- a lot of work to do with his four bilaterals yesterday, so his time
--

Q You said there was a lot of talk going on --

SENIOR ADMINISTRATION OFFICIAL: His time was primarily
taken up with his four bilaterals yesterday.

Q Primarily. I mean, were there other conversations the
President had besides the four bilaterals on this issue, with other
leaders?

SENIOR ADMINISTRATION OFFICIAL: There were a number of
informal conversations that took place, but I'm not in a position to
give you chapter and verse on that.

Q -- by the President with other leaders?

SENIOR ADMINISTRATION OFFICIAL: I'm going to leave it
right here at that. One other point that I would make, we don't want to
oversell or undersell what's been done here. This is a very important
move. My colleague has described in some detail what the sector is
about, what the potential is, where the sector fits in both the APEC
economies and in the larger world economy. I think the best way to
understand what's been done here is perhaps an analogy to what was done
in the G-7 just before the conclusion of the Uruguay Round. It was a
push -- a political and economic push that was done by the leaders there
which resulted in the conclusion of the Uruguay Round.

This has the potential, and we believe will have the
effect, of being the political and economic push that's needed to bring
the WTO to bring this agreement to fruition in the time that's laid out.
And so I think that that's the context to view this in, that it has the
potential for sealing the WTO and moving forward -- moving into the
negotiating stage and what could be some very significant negotiations
to take place over time.

I've just been slightly corrected or added to here. In
addition to the G-7, there is also the history that APEC has of having
pushed in Seattle to bring the Uruguay Round to conclusion as well. So
there is a repetition of history here and a repetition of very positive
history, we hope.

Q I should know the history better than this, but how long
has this dispute been sort of there on the -- festering or on the back
burner?

SENIOR ADMINISTRATION OFFICIAL: I wouldn't -- don't look
at this in terms of a dispute. This issue is -- we have been beginning
this push since the end of the Uruguay Round. And this is a very
effective vehicle for pushing forward. The first ministerial of the WTO
will be in Singapore in December, so this --

Q Would it be fair to say -- people have talked about the
benefits of APEC being that leaders can do things that the ministers
can't. Is this a fair example of that, that the leaders can give a push
to this?

SENIOR ADMINISTRATION OFFICIAL: I think that the ministers
did a lot of work on this, but I think it's clear that the leaders
pushed it over the top.